Hemp growers just say no

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Hemp prices remain low, forcing hemp growers to decide not to plant crops for 2022. Hemp Benchmarks reported that December prices for hemp crops remained in the doldrums, as past overproduction led to a fall. too much supply and not enough buyers. Despite some promising end markets, there is simply not enough demand for farmers to take the risk. In addition to low prices and oversupply, the hemp market is also facing supply chain issues such as rising trucking costs. Additionally, other crops like corn and soybeans saw their prices rise, prompting some farmers to give up hemp.

There are high hopes for industrial hemp fiber, but this market is also hampered by a lack of processing facilities and a lack of industrial standards. There are no government guidelines for hemp fibers as is the case, for example, for cotton, which has standards set since 1918.

Price drop

Delta-8 cannabis had been seen as the saving grace for hemp growers when demand for CBD products was unable to keep up with supply. However, several states began to ban Delta-8 because the product was poorly regulated. Hemp Benchmarks wrote: “The observed price for THC Delta-8 distillate fell for the sixth consecutive month, falling 4% from November to an average of $ 839 per kilogram in December. The lower end of the listed price range fell to $ 450 per kilogram, from $ 650 per kilogram in November. The upper end of the observed price range also fell, from $ 1,200 per kilogram in November to $ 1,100 per kilogram this month. “

The Benchmarks also posted the following prices for CBD:

Greenhouse Cultivated CBD Flower (Bulk)

  • Average $ 384 per pound (down 2% from November)
  • Low – High: $ 80 – $ 700 per pound
  • The average price is 44% higher than the overall price

Spot price of the CBD flower. Outdoor Cultivated CBD Flower (Bulk)

  • Average: $ 156 per pound (up 2% from November)
  • Low – High: $ 50 – $ 400 per pound
  • The average price is 41% lower than the overall CBD flower spot price

Reduced acres

Colorado was once one of the largest states for hemp production is a prime example of reducing acres of hemp planted. Colorado Business Outlook 2022 released in December even addressed the hemp market in its report. He writes: “Hemp, which experienced a huge boom when it was first legalized as a cash crop, has grown from 2,000 registered Colorado growers in 2019 to around 500 in 2021, and from 87,000. acres at 21,000. Growers cite the lack of a market and processing facilities for hemp fiber and competition from other states legalizing industrial hemp, creating a plentiful supply in the market. State government support for hemp remains strong, and there are still many strong supporters of the culture. The Ministry of Agriculture continues to work on development projects for hemp flour, fiber and other uses.

Farmers were also faced with extreme weather conditions. The west has seen massive wildfires in California and Oregon. Louisiana and Vermont both drowned in excessive rains, while Texas started the year with a catastrophic cold snap. Hemp Benchmarks also wrote that veteran hemp farmer in New York City, Allan Gendlemen, told WSHU radio that he lost one of his six acres to rain in 2021. “It was all completely inundated with water. and the plants are literally dead, ”he said. “And now that’s an empty field.”

Expensive trip

While all of this bad news weren’t enough to scare off most hemp growers, just getting the product to a processing facility also costs more. Hemp Benchmarks said in its December report that hemp logistics company Fide Freight provided data on the rates for shipping bulk hemp products by truck that showed significant increases in average shipping prices compared to Last year. The report said: “As of this month, the average rates for moving bulk hemp products in a ‘dry van’ from Denver, Colorado to various selected locations have increased from 22% to 94% of a year. year over year, with the route from Denver to Los Angeles, California, to see the biggest jump.

Regulations are a mess

The lack of guidance from the FDA certainly hasn’t helped CBD growers and hemp growers. Last month, New York Rep. Kathleen Rice, Morgan Griffith (VA-09), Angie Craig (MN-02) and Dan Crenshaw (TX-02) presented a bipartisan bill which would set federal standards for CBD food and drink products to protect consumers and ensure market stability for farmers, producers and retailers. CBD companies have faced sanctions over product labeling and website claims, but have not received any direction from the government that impedes their ability to promote and sell their products.

“CBD products are exploding in popularity, but the lack of federal regulation surrounding them has put consumers at risk and left businesses looking for clarity,” said Representative Rice. “The bipartite CBD Product Safety and Standardization Act will establish the clear regulatory framework necessary to ensure business stability and ensure that unsafe products are not marketed. The bipartisan CBD Product Safety and Standardization Act would allow the FDA to regulate CBD as it would any other food ingredient and subject those products to enforceable guarantees to ensure liability. It also directs the agency to establish CBD content limits and packaging and labeling requirements and to determine in which food categories CBD is appropriate for use.

“We strongly support the FDA’s requirement to regulate hemp extracts like CBD as food and beverage ingredients,” said Jonathan Miller, general counsel, US Hemp Roundtable, the national advocacy organization. hemp industry.

States have also complicated the regulatory landscape with see-saw decisions around Delta-8. Texas, for example, tried to define Delta-8 as a Schedule 1 substance, prompting retaliation from retailers, winning a lawsuit that temporarily lifted the ban. However, an appeal was filed, which resulted in the ban being reverted. The fate of Delta-8 in Texas is now mired in the courts.

Promising markets

Hemp growers remain optimistic even in the face of so many obstacles. Even as demand for CBD flattens, the projected market for hemp fiber and grain is $ 32 billion by 2030. Hemp Benchmarks wrote that Melissa Nelson-Baldwin is co-owner of South Bend Industrial Hemp in Kansas and that the company grows hemp grain and fiber. since 2019 and opened its processing plant last June. NelsonBaldwin told Hemp Benchmarks that their decortication facility, considered the first of its kind in the Midwest, has been busy since it was first put into operation. The hemp fiber trade, she said, has “grown exponentially.” There weren’t any three years ago, and now I need three teams at my facility. ‘ ”

Many believe that industrial hemp will be a larger market than the market for dietary supplements. The National Hemp Association wrote in its Economic impact report, “The average hemp and grain fiber processing plant employs 117 people, with an annual payroll of $ 6.1 million. The total economic output attributed to a single processing facility is estimated to be over $ 30 million. He went on to say, “By 2030, industrial hemp can represent more than $ 9 billion in economic output in rural areas.”

So, the potential promise of hemp allows many in the industry to stay focused even though the current environment remains tough. It seems only the strong will survive and growing hemp definitely becomes a labor of love.


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